Status: The figures below are from the proposed rule. CMS usually publishes the final rule in early November (Oct 31 in 2025; Nov 1 in 2024). We will update this page the day it is released, and changes take effect January 1, 2027.
The Short Version
- The proposed 2027 Medicare conversion factor is $32.8409 for most therapists, down 1.68% from $33.4009, because a one-year 2.5% increase for 2026 expires.
- Even so, CMS projects therapy payments up roughly 1–3% overall, because practice-expense changes raise the value of many therapy codes.
- The KX modifier threshold rises to $2,540 (PT and SLP combined; OT separate). Targeted medical review stays at $3,000.
- Remote therapeutic monitoring would require an established patient, an initiating visit and directly employed staff.
- PTs, OTs and SLPs can keep billing Medicare telehealth through December 31, 2027, and CPT 92507 is replaced by 92654–92663.
What Is the 2027 Medicare Physician Fee Schedule?
The 2027 Medicare Physician Fee Schedule (MPFS) sets how much Medicare Part B pays for every CPT code, including physical, occupational and speech therapy, for dates of service from January 1 to December 31, 2027. CMS released the proposed rule on July 14, 2026; the final rule is expected in November 2026.
Each code’s payment is its relative value units (work, practice expense and malpractice), adjusted for your locality, multiplied by the conversion factor. That means two things move a therapist’s Medicare payment each year: the conversion factor, which applies to every code, and the RVUs of the specific codes you bill. In 2027 they move in opposite directions.
2027 Medicare Changes for Physical Therapy at a Glance
| Item | 2026 | 2027 |
|---|---|---|
| Conversion factor, most therapists (non-QP) | $33.4009 | $32.8409 (proposed, −1.68%) |
| Conversion factor, qualifying APM participants | $33.5675 | $33.1693 (proposed, −1.19%) |
| Projected overall therapy payment | — | About +1% to +3% (CMS and APTA estimates) |
| KX threshold, PT + SLP combined | $2,480 | $2,540 (proposed) |
| KX threshold, OT | $2,480 | $2,540 (proposed) |
| Targeted medical review threshold | $3,000 | $3,000 |
| Remote therapeutic monitoring | Current rules | Established patients, initiating visit, employed staff (proposed) |
| Medicare telehealth for PT, OT, SLP | Allowed | Allowed through Dec 31, 2027 (law) |
| Individual SLP treatment | CPT 92507 | CPT 92654–92663 (AMA CPT 2027) |
| PTA/OTA (CQ/CO) services | 85% of fee schedule | 85% of fee schedule |
Proposed values from CMS-1848-P (91 FR 43842). Final values may differ.
The 2027 Medicare Conversion Factor, Explained
CMS proposes a 2027 conversion factor of $32.8409 for clinicians who are not qualifying APM participants, which includes most private-practice therapists. That is $0.56 (1.68%) lower than 2026. Qualifying APM participants would get $33.1693, down 1.19%.
The cut is mostly a math reset. Congress added a one-time 2.5% increase for 2026, and it ends on December 31, 2026. The 2027 figure includes the statutory updates (+0.25% for non-QPs, +0.75% for QPs) and a +0.53% budget-neutrality adjustment, but those don’t fully replace the expiring 2.5%. Congress could still act before January, as it has in past years, so watch the final rule.
Will Physical Therapy Medicare Payment Go Up or Down in 2027?
Despite the lower conversion factor, CMS projects a small overall increase for physical and occupational therapy in 2027. Analyses of CMS’s impact table put the increase at about 3% from RVU and practice-expense changes, or roughly +1.3% after the conversion factor cut; APTA describes it as 1–3%.
The reason is a proposed rewrite of how practice expense is calculated, which favors clinicians who work in offices rather than facilities. Therapy codes such as therapeutic activities, neuromuscular re-education, self-care and evaluations may move differently from each other, so your result depends on your code mix and locality.
- Clinics heavy in timed treatment codes (97110, 97530, 97112, 97140) should model their own top codes once the final RVU files are posted.
- Facility-based outpatient therapy may see a different effect than private practices.
- Contracts tied to a percentage of Medicare will move automatically on January 1.
For current per-code amounts, see our physical therapy CPT codes and 2026 reimbursement rates.
2027 Medicare Payment Impact Calculator for Therapy Clinics
Enter your annual Medicare Part B therapy collections to see two scenarios: the conversion factor cut alone, and the projected net therapy change.
Estimate your 2027 Medicare therapy revenue
Conversion-factor-only scenario uses $32.8409 ÷ $33.4009 (−1.68%). The default net change (+1.3%) reflects published analyses of CMS’s proposed impact table. Planning estimate only; your code mix, locality, MPPR and payer contracts change the result.
KX Modifier Threshold 2027: $2,540
CMS proposes a 2027 KX modifier threshold of $2,540 for physical therapy and speech-language pathology combined, and a separate $2,540 for occupational therapy, up from $2,480 (a 2.5% MEI update). The targeted medical review threshold stays at $3,000.
Once a patient’s allowed therapy charges for the year pass the threshold, every additional line needs the KX modifier and documentation of medical necessity, or the claim denies. With the review threshold unchanged, the gap between KX and targeted review narrows to $460. Read our full KX modifier guide.
Remote Therapeutic Monitoring Changes for 2027
CMS proposes three new conditions for remote therapeutic monitoring (RTM) in 2027: RTM would be limited to established patients, the practitioner would need to furnish a separately reportable initiating visit, and the clinical staff time billed must come from staff directly employed by the practice, not outside contractors.
Clinics that outsource RTM monitoring to a vendor should review the model before January. The 2026 RTM codes (98979, 98984, 98985) that allowed shorter monitoring periods remain part of the code set. See our remote therapeutic monitoring overview.
Medicare Telehealth for PTs, OTs and SLPs Through 2027
Physical therapists, occupational therapists and speech-language pathologists can continue to bill Medicare for telehealth services through December 31, 2027, under the Consolidated Appropriations Act, 2026. The 2027 fee schedule carries that extension into Medicare regulations.
Telehealth visits still need the right place-of-service code and modifiers for the payer, and the same documentation as an in-person visit.
2027 Speech Therapy Codes: CPT 92507 Is Replaced
On January 1, 2027, CPT 92507 is deleted and replaced by ten timed speech-language treatment codes, 92654 through 92663: a 30-minute base code and a 15-minute add-on in five clinical categories. CMS proposed Medicare payment values for all ten in the 2027 rule.
SLP clinics need new templates, minute tracking and fee schedules before January. See our full guide to the new speech therapy CPT codes for 2027, with a code calculator.
What Stays the Same in 2027
- The 8-minute rule for timed codes. See our Medicare 8-minute rule guide.
- GP, GO and GN modifiers on every therapy line.
- CQ and CO services by assistants paid at 85% of the fee schedule.
- Multiple procedure payment reduction on the practice expense of additional “always therapy” units.
- Plan-of-care certification within 30 days, recertification at least every 90 days, and progress reports every 10 treatment days.
2027 Medicare Readiness Checklist for Therapy Clinics
- Load the final 2027 fee schedule and update expected-payment amounts by payer.
- Set KX alerts at $2,540 (PT + SLP) and $2,540 (OT) once final.
- Review RTM: established patients, initiating visit, employed staff.
- Build SLP templates and charge codes for 92654–92663; retire 92507 for 2027 dates of service.
- Confirm telehealth place-of-service and modifier rules for each payer.
- Recheck commercial and Medicare Advantage contracts priced as a percentage of Medicare.
- Model your top 10 CPT codes against the final RVUs and update your 2027 budget.
- Train billers and therapists before the first January claims go out.
How Physical Therapy Billing Software Handles the 2027 Changes
Most 2027 changes land in the billing system: new rates, a new KX threshold, new SLP codes and new RTM rules. When documentation and billing share one record, the minutes in a signed note become the right codes, units and modifiers automatically, and KX alerts fire before a claim is sent.
Practice Pro’s billing and RCM runs on the same record as its PT, OT and SLP documentation, with an optional RCM team that can work your 2027 transition with you. Comparing systems before January? See the best physical therapy EMR software comparison.
2027 Medicare Fee Schedule for Physical Therapy: FAQs
Sources & references
- CMS, CY 2027 Physician Fee Schedule proposed rule (CMS-1848-P), Federal Register, July 16, 2026 (91 FR 43842).
- American Hospital Association and Holland & Knight summaries of the CY 2027 PFS proposed rule (conversion factors, KX threshold), July 2026.
- APTA, “Proposed 2027 Medicare Physician Fee Schedule: What PTs Need to Know,” Parts 1 and 2, July–August 2026.
- WebPT, “The 2027 Proposed Rule Is Out” (APTQI estimate of ~1.3% net therapy update), 2026.
- ASHA, “New Speech-Language Pathology Treatment Codes Replacing 92507.”
- Consolidated Appropriations Act, 2026: Medicare telehealth flexibilities through December 31, 2027.
CPT® is a registered trademark of the American Medical Association. This page summarizes public rules for education and is not legal or billing advice. Proposed values may change in the final rule.